Written by Justin Roberts from Agriland
The gloom has settled in over at CEMA, the umbrella organisation of the EU’s machinery trade associations, as manufacturers fail to see much light from the far end of the tunnel.
The CEMA monthly reports are not based on solid sales figures but, instead, reflect the sentiment of European manufacturers in the agricultural machinery trade and the results for July have recently been released.
One of the major finds was that 66% of respondents considered their current situation unfavourable or very unfavourable, yet within that figure, lies one small spark of hope in that, for June the figure stood at 71%, so there is some lifting of sprits right at the bottom end.
Yet CEMA is not to be cheered, declaring that its Business Barometer not only remains deep in recession, but also falls by a further point to -57 (on a scale of -100 to +100). In other words, it has budged a notch down, but has not plummeted any further.
The report from CEMA goes on to note that the slump affects Europe as a whole, yet it does concede that slightly more optimistic trends can be detected, but only in Spain and France, while the current business situation in the Benelux countries is also assessed as relatively better.
CEMA admits that the situation is better in France
The document is, by its very nature, restricted in its outlook, only interpreting the results of its survey rather than taking a broader view of the industry where there are signs that not everyone is as depressed as the European machinery manufacturers.
In America, the big three tractor corporations are registering drastic falls in sales figures while at the same time still paying dividends on their shares.
CNH noted a 15% fall in income for the second quarter in 2024 as did AGCO, while John Deere posted a 17% decline, although it’s financial year runs two months ahead of the others. Yet all three still posted a profit.
The big three corporations are obliged to make quarterly earnings calls so that their shareholders can keep track of their investment, and being what they are, the CEOs use the opportunity of painting as rosy a picture of the company’s prospects as possible.
John Deere has attracted much attention for its laying off of staff in a bid to cut costs
Therefore, in their listing of cost saving measures they do not directly mention staff redundancies which has been a distinctive feature of the first half of this year, whereas CEMA focuses on this unfortunate angle and notes that 61% of the companies surveyed are planning layoffs of temporary staff, and 21% full-time staff.
This underlines a major difference between the American and European business models, or corporate, versus family-owned companies, there is greater appreciation of the human capital on this side of the Atlantic.
Yet optimism is not totally absent from the European stage for over in Italy Confindustria, the country’s trade and industry body has just set down a plan for moving forward, rather than dwelling on the present depression.
Italian business has called for the government to secure energy supplies and stabilise prices
Central to the organisation’s view of the future is the question of energy supplies, something that effects all Italian and European industries as energy costs have spiralled over the last couple of years.
It is reported that the body’s new president, Emanuele Orsini, has said that it is necessary to cross the finish line of energy independence before focussing exclusively on renewables – a clear challenge from Italian industry to all European governments.
Energy cost has a large impact on machinery prices and until these are tamed, there is unlikely to be any let up in the rising cost of tractors and implements here in Ireland or anywhere else in Europe, leading to further forecasts of doom from CEMA.
The post Grey clouds at CEMA as big three in US still post profits appeared first on Agriland.co.uk.
Continue reading on the Agriland Website...
The CEMA monthly reports are not based on solid sales figures but, instead, reflect the sentiment of European manufacturers in the agricultural machinery trade and the results for July have recently been released.
One of the major finds was that 66% of respondents considered their current situation unfavourable or very unfavourable, yet within that figure, lies one small spark of hope in that, for June the figure stood at 71%, so there is some lifting of sprits right at the bottom end.
Yet CEMA is not to be cheered, declaring that its Business Barometer not only remains deep in recession, but also falls by a further point to -57 (on a scale of -100 to +100). In other words, it has budged a notch down, but has not plummeted any further.
Brighter notes from CEMA
The report from CEMA goes on to note that the slump affects Europe as a whole, yet it does concede that slightly more optimistic trends can be detected, but only in Spain and France, while the current business situation in the Benelux countries is also assessed as relatively better.
CEMA admits that the situation is better in France
The document is, by its very nature, restricted in its outlook, only interpreting the results of its survey rather than taking a broader view of the industry where there are signs that not everyone is as depressed as the European machinery manufacturers.
In America, the big three tractor corporations are registering drastic falls in sales figures while at the same time still paying dividends on their shares.
CNH noted a 15% fall in income for the second quarter in 2024 as did AGCO, while John Deere posted a 17% decline, although it’s financial year runs two months ahead of the others. Yet all three still posted a profit.
The big three corporations are obliged to make quarterly earnings calls so that their shareholders can keep track of their investment, and being what they are, the CEOs use the opportunity of painting as rosy a picture of the company’s prospects as possible.
John Deere has attracted much attention for its laying off of staff in a bid to cut costs
Therefore, in their listing of cost saving measures they do not directly mention staff redundancies which has been a distinctive feature of the first half of this year, whereas CEMA focuses on this unfortunate angle and notes that 61% of the companies surveyed are planning layoffs of temporary staff, and 21% full-time staff.
This underlines a major difference between the American and European business models, or corporate, versus family-owned companies, there is greater appreciation of the human capital on this side of the Atlantic.
The energy question
Yet optimism is not totally absent from the European stage for over in Italy Confindustria, the country’s trade and industry body has just set down a plan for moving forward, rather than dwelling on the present depression.
Italian business has called for the government to secure energy supplies and stabilise prices
Central to the organisation’s view of the future is the question of energy supplies, something that effects all Italian and European industries as energy costs have spiralled over the last couple of years.
It is reported that the body’s new president, Emanuele Orsini, has said that it is necessary to cross the finish line of energy independence before focussing exclusively on renewables – a clear challenge from Italian industry to all European governments.
Energy cost has a large impact on machinery prices and until these are tamed, there is unlikely to be any let up in the rising cost of tractors and implements here in Ireland or anywhere else in Europe, leading to further forecasts of doom from CEMA.
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The post Grey clouds at CEMA as big three in US still post profits appeared first on Agriland.co.uk.
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